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RELATED PARTY TRANSACTIONS
9 Months Ended
Dec. 31, 2012
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure Excluding Due To Or From [Text Block]

NOTE 13 – RELATED PARTY TRANSACTIONS

During the three months ended December 31, 2012 and December 31, 2011 the Company sold approximately $647,000 and $0 respectively to Starlight Electronics Company, Ltd. During the nine months ended December 31, 2012 and December 31, 2011 the Company sold approximately $1,813,000 and $1,541,000 respectively to Starlight Electronics Company, Ltd. These goods were sold at a discounted price, similar to prices granted to major direct import customers shipped internationally with freight prepaid. The average gross profit margin on sales to Starlight Electronics for the three months ended December 31, 2012 and December 31, 2011 was 12.4% and 0%, respectively. The average gross profit margin on sales to Starlight Electronics for the nine months ended December 31, 2012 and December 31, 2011 was 12.6% and 7.6%, respectively. The product was drop shipped to Cosmo Communications of Canada (“Cosmo”), the Company’s primary distributor of its products to Canada. During the three months ended December 31, 2012 and December 31, 2011 we sold an additional $36,150 and $50,000 respectively of product to Cosmo from our California warehouse facility. During the nine months ended December 31, 2012 and December 31, 2011 we sold an additional $361,824 and $50,000 respectively of product to Cosmo from our California warehouse facility. These amounts were included as a component of cost of goods sold in the accompanying condensed consolidated statements of operations.

 

The Company purchased products from Starlight Consumer Electronics USA, Inc. (“SCE”) a subsidiary of Starlight International Holding Ltd. The purchases from SCE for the three month period ended December 31, 2012 and 2011 were $2,346,387 and $4,217,766, respectively. The purchases from SCE for the nine month period ended December 31, 2012 and 2011 were $7,306,460 and $7,231,641, respectively.

 

During the three month period ended December 31, 2012 and December 31, 2011 the Company purchased products from Cosmo Communications USA, Inc. (“Cosmo USA”) in the amount of $0 and $33,500, respectively. During the nine month period ended December 31, 2012 and December 31, 2011 the Company purchased products from Cosmo Communications USA, Inc. (“Cosmo USA”) in the amount of $0 and $171,551, respectively.

 

On July 1, 2012, SMC-L entered into a service and logistics agreement with Starlight Consumer Electronics (USA), Inc. (“Starlight USA”), an indirect wholly-owned subsidiary of Starlight International, Cosmo USA, Inc. (“Cosmo USA”) and Starlight Electronics USA, Inc. (“Starlight Electronics USA”) to provide logistics, fulfillment, and warehousing services for Starlight USA, Cosmo USA and Starlight Electronic USA’s domestic sales. For these services, Starlight USA, Cosmo USA and Starlight Electronics USA have agreed to pay the Company annual service fees totaling approximately $435,000 payable monthly beginning July 1, 2012. The Company received $133,219 and $0 in service fees from these affiliates during the three months ended December 31, 2012 and December 31, 2011, respectively. The Company received $266,238 and $0 in service fees from these affiliates during the nine months ended December 31, 2012 and December 31, 2011, respectively. This agreement terminates on April 30, 2013 at which time another annual agreement is expected to be signed for approximately the same amount.

 

On August 1, 2011, SMC-L entered into a service and logistics agreement with affiliates Starlight Consumer Electronics (USA), Inc., Starlight USA, Inc. and Cosmo USA to provide logistics, fulfillment, and warehousing services for these affiliates’ domestic sales. The Company received $0 and $249,999 in service fees from these affiliates during the three months ended December 31, 2012 and December 31, 2011, respectively. The Company received $249,999 and $749,997 in service fees from these affiliates during the nine months ended December 31, 2012 and December 31, 2011, respectively. For the three months ended December 31, 2012 and 2011, the Company additionally received reimbursements from these affiliates in the amount of $0 and $6,215, respectively for expenses and salaries incurred by SMC-L on their behalf. For the nine months ended December 31, 2012 and 2011, the Company additionally received reimbursements from these affiliates in the amount of $0 and $21,585, respectively for expenses and salaries incurred by SMC-L on their behalf. This agreement terminated on June 30, 2012.